NAREB president calls for 'optimistic underwriting'

"If you're applying for an FHA mortgage, I believe 83% of first-time homebuyers go through FHA, and if you're married, you have to use your spouse's income in the approval process. So, a husband and wife are married—only the husband is getting a loan. The wife's debt goes into that calculation of the application, not her income. She's not going on the loan, but her debt is being calculated, which makes it very challenging for someone to qualify."

"States affected are California, Texas, Nevada, Arizona, New Mexico, Wisconsin, Washington, Louisiana and Idaho. He added that government-sponsored enterprises like Fannie Mae and Freddie Mac do not require this treatment of spousal debt. We look at that as an imbalance of underwriting. We are challenging HUD."

NAREB is tackling barriers preventing first-time homebuyers from achieving homeownership through multiple initiatives. The organization launched an eight-city affordable homeownership bus tour and mobilized over 100 local boards for home restoration support. A key policy focus is the Community Property Fairness Initiative, which addresses an underwriting imbalance in nine states where married couples applying for FHA mortgages must include spousal debt in calculations even when only one spouse is on the loan. This practice affects approximately 83% of first-time homebuyers using FHA loans. Unlike government-sponsored enterprises such as Fannie Mae and Freddie Mac, the FHA requires this treatment, creating qualification challenges. NAREB is publicly challenging HUD to align FHA underwriting standards with industry practices.

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